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Cheese of the Month - October 2017

Processed cheeses provide cooking, snacking solutions

Editor’s Note: “Cheese of the Month” is Cheese Market News’ exclusive profile series exploring various cheese types. Each month, CMN highlights a different cheese in this feature, giving our readers a comprehensive look at production, marketing, sales and in-depth aspects of each profiled cheese type. Please read on to learn about this month’s featured variety: processed cheese.

By Rena Archwamety

MADISON, Wis. — The origin of processed cheese goes back more than 100 years, and the first commercially processed cheese was developed by Walter Gerber in Switzerland in 1911, according to the Department of Food Science and Human Nutrition, Michigan State University (MSU). James L. Kraft, who founded the company that would become Kraft Foods, experimented with the process and received the first patent in 1916. In 1921, George Garstin of the Phenix Cheese Co. patented the emulsifying process. Kraft merged with Phenix in 1928.

According to MSU, processed cheese is made from natural cheeses shredded and heated to a molten mass of protein, water and oil. This mass then is emulsified during heating with emulsifying salts to produce a stable oil-in-water emulsion. Depending on the desired end use, the melted mixture then is reformed and packaged into blocks or slices, or into tubs or jars. Processed cheeses typically cost less than natural cheeses, have a longer shelf life and can be formulated into a variety of products.

Compared to natural cheese, processed cheese’s biggest advantages are extended shelf life and uniformity of product while being cooked or heated, says Brett Thompson, vice president of sales and marketing for Dairyfood USA Inc., Blue Mounds, Wisconsin.

“Different emulsifying salts are used in the formula to achieve different melting characteristics,” he says. “Some applications might require more of a restricted melt, especially something cooked at a higher temperature. On the flip side, there are applications for cheese that require an easy melt for perhaps a sandwich, where the consumer expects the cheese to melt smoothly and evenly.”

Processed cheese has experienced sales declines over the last five years. Currently it accounts for 16.2 percent volume share of fixed weight cheese, according to data from Information Resources Inc. (IRI), courtesy of Dairy Management Inc. (DMI). Processed cheese is found in 65 percent of total U.S. households, and it indexes most highly among families with children.

Among processed cheese varieties, Cheddar, Swiss and Monterey Jack are the top sellers, similar to overall top cheese varieties. The most rapidly-growing varieties for processed cheese include Gouda, other Hispanic and other cheese blends, IRI reports. The majority of processed cheese sold is under national brands (75 percent), compared to private label (25 percent). Sliced is the most popular processed cheese form by volume (75 percent), followed by loaf (15 percent) and chunk (8 percent).

The shelf-stable attributes of processed cheese make it ideal for gift-giving and entertaining. IRI notes that processed cheese volume sales rise during many holidays throughout the year, especially Christmas/New Year’s, Super Bowl Sunday weeks, Memorial Day and July 4.

Dairyfood USA, which specializes in processed cheese, does approximately 85 percent of its business in private label (both retail and foodservice), with the remainder in branded products. Its flagship product is its naturally-smoked Gouda, which is available in various formats.

“What separates our smoked Gouda from other products in the deli case is our cheese is naturally smoked. Most other Goudas use artificial smoked flavor,” Thompson says.

“There is no doubt smoked cheeses in general have been trending significantly higher in the past five years,” he adds. “Our customers like the mild smoked flavor and clean finish.”

In addition to smoked cheeses, customers also have been demanding simplified labels and healthier options for processed cheeses, he says.

“The biggest thing lately is customers requesting cleaner ingredients,” Thompson says. “In some applications, they want reduced sodium and fat, especially for schools. We listened to our customers and now offer 1.5- or 2-ounce cups with one-third less sodium and fat as compared to our typical cheese spreads.”

Processed cheese also is a part of many new snacking innovations. The Laughing Cow brand recently extended its line of Cheese Dippers, a portable snack that combines The Laughing Cow cheese with breadsticks in individually-portioned containers, which initially launched last year. The line now includes new Creamy Swiss Garlic & Herb and Creamy White Cheddar flavors in addition to Creamy Swiss with Classic Breadsticks and Creamy Swiss with Tomato & Herb Breadsticks.

“We want consumers to take our Cheese Dippers wherever they go — whether it’s in a school lunchbox, during a family weekend trip to the zoo or in the car on the way home from a big game,” says Francis Perrin, chief marketing officer, Bel Brands USA, parent company of The Laughing Cow.

Over the next year, Dairyfood USA is focusing on new snack applications for its processed cheeses.

Currently it is launching a line of organic spreadable cheese wedges under the Blue Mound Creamery brand. These are available in White Cheddar and Jalapeño Cheddar varieties and will be available for private label in addition to its own retail brand.

With its consistent and customizable attributes, processed cheese is ideal for cooking, foodservice and ingredient applications, and manufacturers have introduced new products for these customers as well.
Dairyfood USA also currently is launching a shredded smoked Gouda in 5-pound bags for its foodservice customers.

“This is one item we’ve received a lot of interest in lately for mac and cheese, soups and pasta dishes,” Thompson says. “It’s a very unique item — I haven’t seen anything else out there like it that’s a naturally smoked product.”

Kraft Heinz in recent years has introduced a number of new products in its Velveeta line, including Velveeta Stuffed Grilled Cheese and Velveeta Cheesy Bites, which rolled out earlier this year. Last year it introduced Velveeta Mini Blocks — 4-ounce individually wrapped blocks of Velveeta for use in everyday meals and side dishes that allow unused portions to stay wrapped and sealed until ready to use.

“It’s common knowledge that Velveeta makes an amazing dip and mac & cheese, but what a lot of people don’t realize is that it’s also the cheesy answer to hundreds of dinner solutions,” says Jamee Pearlstein, brand manager, Kraft Heinz.

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